How to Enter Customer Prepayment in QuickBooks

Entering customer prepayment in QuickBooks is something that you can do from the item list. Enter customer prepayment in QuickBooks with help from a financial planner and personal finance coach in Washington, D.C. in this free video clip.

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Hi, I'm Dominique Broadway, financial planner and personal finance coach and I will be showing you how to enter customer pre-payments in QuickBooks. Now please keep in mind that these instructions will vary based on the version of the QuickBook software that you are using. First, in the chart of accounts, create the customer pre-payment account as an other current liability. On the item list, create a non-taxable service item called customer deposit and link it to the customer pre-payment account that you just created. Next you will create a customer account if needed. Next, you will record the non-taxable receipt using invoice or a sales receipt. Use the item code set up in step one. When the work is done or the product is delivered, invoice as normal. Reduce the invoice by the amount of the deposit being used for that invoice by using the customer deposit code and applying the amount as a negative. This will eliminate the deposit amount. Next you will accept the payment for the remaining balance as normal. I'm Dominique Broadway and I've just shown you how to enter customer pre-payments in QuickBooks.